Aid and the Private Sector—what it looks like on the ground

There are good reasons for the business sector to be playing a greater role in development. Improved dialogue with AusAID provides an opportunity to work together to reduce barriers while improving the operating environment for business. For most developing countries, aid flows are now dwarfed by private investment flows, bringing into focus the role of the private sector in promoting development and overcoming poverty.

AusAID’s business engagement agenda seeks to achieve greater effectiveness in the aid program by cooperating with the business community to jointly deliver creative solutions that help people overcome poverty. AusAID has extensive experience building operating environments which support the growth of the private sector—this includes enablers such as better infrastructure, a better regulatory environment, economic and financial reform. AusAID also works with many partners including civil society and multilateral organisations to improve infrastructure, education, health, financial inclusion and empowering women to provide the right conditions for economic development.

AusAID has already achieved success in working alongside the private sector in a range of countries—below are a few examples of this.

Improving food security in Zimbabwe

Small-scale growers are supported and equipped to improve production and cultivate staple crops for their families and communities. Photo: Corin Mitchell

SPICE IT UP with the Africa Enterprise Challenge Fund—Zimbabwe Window

After a decade of political instability, drought and declining agricultural production, food security has become a significant issue in Zimbabwe. At the end of 2010, seven million people were dependent on food aid and one-in-three children were chronically malnourished.

In response, AusAID contributed $22 million to a multi-donor Zimbabwe Window of the Africa Enterprise Challenge Fund. The fund promotes agricultural development and food security through private sector innovations and support to local businesses. The fund is also supported by contributions from the private sector. To date, it has supported 19 companies, including KAITE.

KAITE has a growing network of small-scale farmers in rural areas who are growing herbs, spices, medicinal plants and produce for high value, certified essential oils.

By 2015, KAITE expects to be working with 6,000 farmers, many of whom are women. It hopes to be working with 10,000 farmers by 2020, benefiting an estimated 36,000 people.

Improving access to financial services in the Pacific

Community facilitators in Fiji receiving training on how to promote the use of mobile money in their villages. Photo: Mereseini Senikau / UNCDF

Supporting access to branchless banking through the Pacific Financial Inclusion Program

Around half of Fiji’s population (400,000) live in rural or regional areas, where they have limited ability to save and transfer money securely.

AusAID is partnering with the United Nations Capital Development Fund, Pacific Financial Inclusion Program, to provide sustainable financial services to low income households. By working with mobile phone service providers, Digicel and Vodafone, the program provides a secure way to save and transfer money.

The program previously helped launch the ‘mobile money’ initiative in Papua New Guinea, Samoa, Tonga and Vanuatu. Since 2010, Digicel and Vodafone have signed-up more than 480,000 users across five countries, more than 170,000 of whom had not previously had a bank account. The program provides a low cost, secure means of transferring and storing funds, paying bills and, since 2011, receiving international remittances.

Volunteering for international development

Margaret Blanch works with teachers at Pakpasak Technical College to develop the English teaching curriculum, as well as teaching and learning strategies. Photo: Bart Verweiji

Australian Volunteers for International Development (AVID)—teacher training at the Pakpasak Technical College, Laos

Laos currently has poor education standards with budget allocations to the education sector amongst the lowest in the world.

Pakpasak Technical College, in Vientiane, trains adult students across a range of vocational areas. One of the main challenges the college faces is the limited experience, teaching skills and methodologies of its English teachers. This is compounded by a lack of available teaching materials.

AVID business volunteer, Margaret Blanch, worked with English teachers at Pakpasak to improve the quality of their training courses.Margaret was responsible for training teachers in Communicative English Language Teaching to improve methods and associated classroom activities. Margaret also helped teachers develop effective lesson plans and other teaching resources, raising the standard of teacher training in Laos.

AVID provides opportunities for the Australian private sector to directly contribute to delivering the aid program by providing business volunteers. These volunteers help create a better environment for economic growth by sharing their skills and knowledge with host organisations in our partner countries.

Helping women entrepreneurs in Indonesia

Sunarmi, pictured in her weaving workshop in Cabean, Central Java, now has a growing business that employs 15 staff. Photo: Josh Estey

The Indonesian Government’s National Program for Community Empowerment—supporting women entrepreneurs

Increasing women’s workplace participation is important as more than 120 million Indonesians live on less than $2 per day. AusAID is supporting local business and communities through the Indonesian Government’s National Program for Community Empowerment. The program works to improve local-level development by providing small grants and loans to help community development.

The program helps women in Central Java obtain loans to establish or expand small businesses, such as weaving or selling fabrics for clothing and decorations. These small businesses provide Indonesian women and their families with modest but significant incomes.

One example is Sunarmi’s small business, which produces hand-woven traditional fabric in Cabean, Central Java. Through the program she was able to access credit at between one and two per cent per month. Before the program, women relied on money lenders who often charged 10 or 15 per cent.